Benefits of private capital under-estimated: Mercer

Superannuation funds should make a meaningful allocation to private capital to reap the rewards of a sophisticated private capital strategy, according to Mercer partner Ray King.

King said that institutional investors had allocated quite a bit of money to private capital up until 2008, when the trend changed and allocations shrank.

But opportunities abounded in market inefficiencies between private capital's sub-asset classes, he said.
Mercer recommended a private capital allocation of 25 per cent concentrated in four sub-asset classes, King said.